Whetstone Capital, the $250m hedge fund known for its contrarian deep-value approach, posted a 21% return in May – its best monthly performance since inception – by doubling down on unloved and mispriced growth names left behind during recent market dislocations, according to a report by MarketWatch.
The Kansas-based fund, founded by David Atterbury and co-managed with Andrew Carlson, has now returned 35% year-to-date through June, driven by sharp rallies in names like fintech firm Dave, cybersecurity company Cloudflare, healthtech provider OptimizeRx, and project software group Monday.com – all of which had previously been written off by much of the market.
The firm credits its performance to a bold increase in exposure during early spring, alongside a timely short book. Carlson noted it was a rare period when “longs were rallying and shorts were falling,” though the fund declined to name specific short positions.
Whetstone targets companies it believes have been “orphaned” by the market but retain credible management and long-term upside. Despite its heavy tilt toward software, the fund is now diversifying into financials, healthcare, ad tech, and financial data in a bid to smooth out volatility, which has been a hallmark of its historical 451% return since inception.
One of Whetstone’s highest-conviction current bets – accounting for 10% of the portfolio – is London-listed TP ICAP. The firm believes the upcoming spin-off of its data arm Parameta Solutions could unlock significant hidden value. If Parameta were to trade at peer multiples, Atterbury estimates it could be worth 80% of TP ICAP’s current enterprise value.
